Northeast India encompasses the states of Assam, Arunachal Pradesh, Meghalaya, Tripura, Manipur, Nagaland and Mizoram. Dubbed as the “seven sisters”, the states are particularly known for their scenic beauty and diverse culture. Spanning 255,083 sqaure km, the region accounts for 7.7 per cent of India’s total land area. However, it houses less than 4 per cent of the country’s population. While the region has considerable renewable energy potential, especially hydro, its role in India’s clean energy transition is often underestimated.
Currently, the states are making an effort to boost their renewable energy capacity, much like the rest of the country. However, given the state of infrastructure and the environmental sensitivity of the region, these efforts need to be redirected to address its specific energy concerns.
Current status
Home to perennial rivers and waterbodies, the region has immense hydropower potential, in addition to what it has already developed. It is estimated by the Central Electricity Authority (CEA) that the region has a total hydropower potential of 58,971 MW. While it has negligible potential for wind installations, it has an estimated solar power potential of 57,360 MW. A large part of this potential is in the states of Assam, Manipur and Mizoram. However, only about 5 per cent of its hydro potential has been developed so far while solar development has been negligible.
The Northeast, meanwhile, faces huge shortages in peak power supply. The CEA reports that the region faces a peak power shortage of 3.1 per cent to 5.4 per cent. Of the north-eastern states, Assam has the lowest electrification rate at 37 per cent, while Mizoram and Nagaland have over 80 per cent each. However, even in the better-performing states, there are wide disparities in access, especially in rural areas. This gap can be bridged through the adoption of renewable energy technologies.
As of June 2021, the north-eastern states have an installed renewable energy capacity of 2,329 MW. About 83 per cent of this capacity is accounted for by hydropower plants that have been set up across the region, which houses some of India’s largest waterbodies. This means that wind, solar, small-hydro plants and bioenergy only represent 385 MW of the region’s power mix. Assam, Tripura and Manipur, in particular, witnessed about 25 per cent growth in their installed renewable energy capacity in 2019-20. While other states have not displayed similar growth, they have planned large projects to increase their clean energy portfolio.
Policy developments and tenders
Arguably the biggest policy move in the region was the proposed development of 1 GW of solar projects in the Northeast under the National Solar Mission in 2019. The projects are set to be implemented by the Solar Energy Corporation of India (SECI) with a ceiling tariff of Rs 3 per kWh. They will also be eligible to receive viability gap funding of Rs 10 million per MW. The minimum project size under the plan is 5 MW, implying that priority is being given to large solar plants. Since this policy was passed, there has been considerable progress in the development of solar projects in the region, especially in Meghalaya, Manipur and Assam.
In Meghalaya, tenders for about 90 MW of solar power were issued in November 2020, including 20 MW of utility-scale projects at the Thamar and Suchen solar parks. Manipur, too, has aimed to capitalise on the government support offered for solar with tenders for about 150 MW of capacity being floated since December 2020. The state also launched a tender for the development of a Rs 22.6 million solar park in Pherzwal district. Assam has made even more progress. Since February 2020, tenders for solar projects with a cumulative capacity of about 200 MW have been floated. In the other states, no major activity has taken place as yet. However, earlier this year, it was announced that about 80 MW of solar power projects would be developed across Arunachal Pradesh, Manipur, Mizoram and Meghalaya, with a central financial assistance (CFA) of Rs 4.27 million. Notably, these projects are mainly large-scale solar or captive projects.
With about 42 per cent of India’s planned hydro projects located in the Northeast, the central government has made a major push for hydropower development in the region. Further, in the Mega Power Policy, 2017, the threshold limit for obtaining mega project status for hydroelectric projects was reduced to 350 MW for the north-eastern states, against 500 MW for the rest of the country. The policy also ensures that the import of capital equipment is free from customs duties. Moreover, the Asian Development Bank (ADB) recently approved a loan of $231 million for the development of the 120 MW Lower Kopili hydroelectric power project in Assam.
Meanwhile, to address the lack of transmission infrastructure in the region, several large-scale projects have been undertaken over the past year. In December 2020, the Cabinet Committee on Economic Affairs approved the North Eastern Region Power System Improvement Project, which will entail an estimated cost of Rs 67 billion. The project underscores the government’s commitment to strengthening the intra-state transmission and distribution infrastructure in the Northeast and promoting economic development in the region. The project is planned to be commissioned by December 2021 and will be owned and maintained by the respective north-eastern state utilities. Similarly, in October 2020, it was announced that Sterlite Power had secured debt funding of Rs 20.7 billion from the Power Finance Corporation to execute the interstate transmission system project connecting the Northeast with western India. The project is expected to supply renewable energy from solar, nuclear and hydropower sources to both regions.
There have also been efforts to improve transmission networks to address state-specific problems. In February 2021, the central government and the Asian Infrastructure Investment Bank signed a loan agreement worth Rs 21.9 billion to develop the Assam Intra-State Transmission System Enhancement project, which is aimed at improving the reliability, capacity and security of the power transmission network in Assam. Similarly, ADB announced a $132.8 million loan to modernise the power grids in Meghalaya, which suffers from frequent power disruptions, especially in rural areas.
Challenges in project development
Problems in land acquisition present a huge challenge for renewable energy development, for two reasons. First, the region’s geographical constraints make it difficult to develop utility-scale renewable energy projects and associated transmission infrastructure for supplying power to remote locations. Second, there is inaccurate and incomplete data on land ownership across many parts of the region. This calls for sustainable resettlement options to be developed both at the central and state levels. Adding to the problem are the difficulties in obtaining environmental clearances from the Ministry of Environment, Forest and Climate Change. More specifically for hydropower projects, many of the rivers in the Northeast are transnational and hence, their full potential may not be utilised. Solving these concerns may become even trickier due to ongoing tensions with some border nations.
Another set of potential concerns comes from the inadequacies in transmission and other supporting infrastructure. The region has a widely “dispersed” demand, which means that the per unit cost of transmission across the seven sisters is higher than in the rest of India. Moreover, the extreme climatic conditions, combined with shortages in labour, have meant that the transmission and distribution system is underdeveloped, adversely affecting the reliability of power supply in the region. On top of this, renewable energy projects need infrastructure backing such as roads, railways and airways, which are still lacking in the region. Even existing infrastructure may not have sufficient strength to carry the heavy machinery required for such projects. To begin with, roads have to be constructed in interior areas, leading to cost and time overruns. This is also linked to the partition of India, as all major road and railway links through the region were cut or had to be modified.
Decentralised solar solutions
With concerns over land acquisition and environmental damage, the states have great potential for decentralised solutions, both for solar and hydropower. Under the Ministry of New and Renewable Energy’s (MNRE) grid-connected rooftop and small-scale solar power plant programme, CFA amounting to 70 per cent of the benchmark project cost is provided for the special category north-eastern states. Manipur was the first to act on this, and has consequently released a solar rooftop policy offering subsidies and exemptions to consumers wishing to set up rooftop systems. While other states do not have dedicated solar policies, Assam has set an ambitious solar power target of 663 MW by 2022.
Under the MNRE’s Development of Solar Cities scheme, the cities of Agartala and Aizawl are being developed as pilot solar cities, while Guwahati and Jorhat will tentatively be developed as model cities. The pilot and model cities will each receive financial assistance of up to Rs 250 million and Rs 950 million respectively, provided the municipal corporation, city administration, state, or any other agency pledges an equal amount.
Despite these initiatives, there is poor penetration of renewable energy technology in the seven sisters area. The reasons for this are linked to low awareness, some level of policy paralysis, land unavailability and lack of funding. Decentralised solutions can play a massive role in improving this situation, but require a dedicated effort or even shifts in priority by the government. A potential solution for this region could be an aggressive push towards rooftop solar, along with either a feed-in tariff or a net metering system. With the Ministry of Power offering more clarity on the new rules for net metering systems, these states can build a concrete roadmap for rooftop solar. With the power outage issues in the region, the adoption of hybrid inverters must be encouraged. To supplement rooftop systems, the respective state governments must promote stand-alone or hybrid home lighting systems to cater to rural areas.
The way ahead
The Northeast is blessed with an abundance of natural resources and has immense potential to help India meet its renewable energy goals. To this end, the last two years have witnessed great progress in the region, with a number of renewable energy projects being constructed or planned. The state and central governments have also prioritised states such as Assam and Meghalaya that have lower electrification rates. At the same time, the path to developing renewable energy in the region must be reconsidered, going forward.
Currently, the biggest challenge in the region stems from the fact that only one of the seven states has a comprehensive renewable energy policy. In a region with low penetration and awareness, individual state policies are vital to foster development. Moreover, the current government schemes that have been designed to provide electricity are primarily concerned with grid expansion. However, this model has so far not been able to provide electricity to the poor and rural population in the Northeast, and may not be able to do so going forward. Hence, renewable energy development in the region must move from large-scale to small-scale installations that will benefit the population who need it the most. Even when large-scale projects are being developed, it is important to offer counselling on how best to use the compensation money for creating assets for sustainable livelihood. This is especially important in the region as education and awareness are relatively low.
The seven sisters are a biological hotspot and have faced a number of environmental problems over the years. Successive Indian forest surveys have reported a net deforestation of about 1,800 square km in the last five years. Additionally, the region is prone to flooding, earthquakes and landslides, making it extremely susceptible to the effects of climate change. The implementation of the draft Environment Impact Assessment 2020 could potentially see developers tap into the region’s massive hydropower potential. Thus, some extra thought must be given in this regard, considering the ecological sensitivity of the region. Similar to solar power solutions, prioritising smaller hydro plants may be appropriate to address potential environmental concerns.
Summing up, the north-eastern states have made good progress in recent years in adopting renewable energy. However, the process may need some modifications owing to the region’s environmental sensitivity and dispersed demand. In the future, distributed renewable energy along with energy storage can be explored as an affordable and efficient solution to ensure quality power supply in the region, while also helping “green” the grid.
By Rithvik Kumar
